EDFPublic Procurement - A

Valuable Tool for Equality

Legal arguments for procurement measures

Christopher McCrudden

Major issues in procurement

Whether to use procurement as a way of delivering services

When procurement is used, how to prevent corruption, discrimination, favouritism, and promote efficient and effective procurement

When procurement is used, how to ensure that it is used to deliver the broad social justice agenda of the government and not cut across it (linkage)

Problems in the past in using procurement

Three problems with linkage in the past: Is it legal? Need to clarify what you can and

can’t do legally Is it sensible and do-able? Need to meet civil

service resistance/lethargy/fear Is it politically advantageous? Need to tackle

political ignorance of the possibilities

More specifically …

What extra value (if any) does such linkage bring, and at what cost?

Are such linkages consistent with a view of procurement as an economic instrument of government?

What legal limits are placed on the use of such linkages by, e.g. EC procurement directives?

Limits deriving from EC

EC Treaty and Directives dating from 1970s, culminating in reforms of 2003

Initial relatively high level of tolerance towards domestic use of procurement linkages

From 1980s to mid 1990s: increasingly hostile reception, particularly from Commission

Limits deriving from EC

From mid 1990s to current: rediscovery of linkages at domestic level; “green procurement”; Corporate Social Responsibility; “equality mainstreaming”

ECJ approach opens up legal space, paving way for revised legislative approach in 2003

EC current approach: ITC/ILO study, leading to Commission guidance?

Rüffert case on Posted Workers Directive and procurement

Domestic trajectory of procurement linkages

Movement away from CCT and Thatcherite approach 1997-2000

New approach mostly under political radar, but significant

Too much happening to be comprehensive, focus only on equality issue

Domestic trajectory of procurement linkages

Prime Minister’s Strategy Unit Report 2003

CRE-CBI approach, and Code of Practice 2003

National Employment Panel report to Chancellor 2003

Domestic trajectory of procurement linkages

Department of Work and Pensions and Jobcentre Plus requirements 2006

GLA approach on Translink, and Olympics contracts

New factor: equality duties

Public sector equality duties (race, disability, gender)

Requirement to have ‘due regard’ to the need to promote equality of opportunity

When exercising public functions: initial dispute over whether procurement included

Guidance from previous equality bodies Some progress in some bodies: GLA, TfL,

ODA, West Midlands

Equality duty and procurement: first impressions Relatively little happening Different dimensions of equality under-researched Reactive rather than proactive approach to assessment No clear nexus established between projects being undertaken

and predicted effect on tackling inequality Equality duty appears to be seen as a subsequent add-on

rather than as central Imposition rather than an opportunity Procurement modalities appear to be “off the peg” rather than

“bespoke” EHRC research report on ODA

White Paper proposals

New equality duty replacing existing duties

Explicit acceptance of importance of equality duty for procurement

Whether, and how best to legislate? What might a Clause dealing with

procurement in the Equality Bill look like?

Basic issues

Clear indication that ‘public function’ includes procurement, but is that enough?

Whether to carry out project by procurement should be subject to duty

How to construct and award particular contracts should be subject to duty

Distribution of procurement opportunities should be subject to duty

Duty should be proactive and positive, not just reactive and negative

Further issues to be considered

To whom should the procurement duties apply? To what contracts should the procurement duty

apply? Do we legislate further what we mean by ‘equality of

opportunity’? Do we legislate further what we mean by‘due

regard’? What do we do about ‘value for money’? What do we do about sanctions, and ensuring

compliance with the duties?

Elements of a clause

(1) For the avoidance of doubt, it is hereby declared that for the purposes of this Act ‘public function’ shall be interpreted as including the purchasing of goods, works and services from outside contractors.

Elements of a clause

(2) Without prejudice to any other obligation in this Act, a public authority shall have due regard to the need to [promote equality of opportunity, etc] when determining the desirability of exercising any of its functions by way of contract.

Elements of a clause (3) Without prejudice to any other obligation in this Act, a public

authority shall have due regard to the need to [promote equality of opportunity, etc]—

(a) when determining the appropriate definition of the subject matter of each of its contracts,

(b) when determining the technical specifications of each of its contracts,

(c) when establishing selection criteria for each of its contracts,(d) when establishing criteria for the award of each of its contracts,

and determining the weighting to be given to these criteria, when the contract is awarded to the most economically advantageous tender,

(e) when considering whether a bid is abnormally low, where any of its contracts is subject to competitive bidding, and

(f) when considering the inclusion of contract performance clauses in each of its contracts.

Elements of a clause

(4) Without prejudice to any other obligation in this Act, a public authority shall consider how best to encourage particular classes of firms that are under-represented in contracting with that public authority in comparison with other classes of firms to undertake more contracting for that public authority, having due regard to the need to promote [equality of opportunity, etc].

Elements of a clause

(5) In complying with its duties under subsections (2), (3) and (4), a public authority shall consider—

(a) measures which might mitigate any adverse impact of the contracting function on the promotion of equality of opportunity; and

(b) measures which might better achieve the promotion of equality of opportunity through the contracting function.

Elements of a clause

(6) In this section “public authority” means a public authority [to which the public sector equality duty applies].

Elements of a clause

(7) Without prejudice to its duties under subsections (2), (3) and (4), a public authority shall in carrying out its functions relating to contracting have regard to the desirability of promoting value for money in the use of public funds. For the purpose of this subsection, ‘value for money’ means-

(a) securing works, goods or services without disproportionate expense, and

(b) the optimum combination of whole-life costs and quality to meet the public authority’s requirements.

Elements of a clause

(8) For the purposes of this section, ‘equality of opportunity’ [etc] means equality of opportunity—

(a) between persons of different religious belief, racial group, age, marital status or sexual orientation;

(b) between men and women generally;

(c) between persons with a disability and persons without; and

(d) between persons with dependants and persons without.

Elements of a clause

(9) A public authority shall take all such steps as are reasonable to secure that no work is executed or goods or services supplied for the purposes of the contract unless

(a) the public authority has complied with the duties under subsections (2), (3) and (4), and

(b) a contractor awarded a contract by the public authority has complied with any obligations resulting from the exercise of these duties.

(10) Nothing in this section affects the validity of any contract.

Elements of a clause (11) This section applies to the exercise by a public authority of

contracting functions falling within a class or description for the time being specified by the Secretary of State, where work is to be executed or goods or services supplied.

(12) The Secretary of State shall by regulations make further provision regarding the duties established in this section. In particular, a regulation under subsection (11) may frame any class or description of contract by reference to—

(a) any work to be executed or goods or services to be supplied under the contract,

(b) any amounts to be paid under or in connection with the contract,

(c) any terms of the contract, and (d) any surrounding circumstances.

Elements of a clause

(13) The Secretary of State may by regulations make any provision which is necessary-

(a) for the purpose of safeguarding national security or protecting public safety or public order, or

(b) for the purpose of ensuring compliance with European Community law.

(14) The regulations-(a) shall be made by statutory instrument, and(b) may not be made unless a draft has been laid before

and approved by resolution of each House of Parliament.

Some issues for the future

What are the best mechanisms for effective procurement linkages?

Can social regulators and social activists cope with non-traditional policy instruments?

Can politicians accept the constraints?

Some issues for the future

Can procurement practitioners engage effectively with non-traditional constituencies?

Can the machinery of government cope with attempts to ensure joined-up government across departments?

What are the real costs and benefits? Empirical research needed